Stonehouse, Hamer, Tassell & Ors v Serenitas Communities Holdings Pty Ltd [2022] QCAT 91

NEIL JAMES TASSELL, CHERYLE TASSELL, COLIN TUCK, PAM TUCK, GLEN TURNER, WARWICK HORAN, KAREN HORAN, BARRY GORDON, GLORIA GORDON, LORIS ADAMI, LYN ADAMI, IAIN KEESON, DAPHNE KEESON, BARRY MASSEY, LYNETTE MASSEY, PHIL MILLER, CATHY MILLER, ROD KYD, MAVIS KYD, BARRY TOMS, HELEN MCMAHON, TREVOR FETHERSTONHAUGH, RAYLENE FETHERSTONHAUGH, DAVID MACK, JACQUI MACK, STEVE ISSANCHON, PAULINE ISSANCHON, RONERT FRANKLIN, ROSENA FRANKLIN, BILL SCHLINK, ANNE BADGER ED BADGER, CANDIDO MENEDEZ, MARIO MENENDEZ, MANUEL MAYENCO, ELISA MAYENCO, BERNADETTE STEWART, KIERAN STEWART, ROD SHEPPARD, KERRY SHEPPARD, ELIZABETH HEARD, JOHN ROWE, GREG CARLON, PAULINE CARLON, LORRAINE CHESTERTON, NEVILLE CUNNING, LINDA CUNNING, ROSS EBZERY, JULIE EBZERY, ALLAN CASSALS, DIANNE CASSELS, ALLAN BAXENDELL, ANTONIA BAXENDALL, KEVIN HARVEY, EDNA HARVEY, NOEL POHLMANN, LYN POHLMANN, PETER HIGGINGBOTTOM, CHRISTINE HIGGINGBOTTOM, RON HUTCHINSON, MARG HUTCHINSON, ANTON BIERMA, SHELLY BIERMA, GFEOFF BURGESS, JOY BURGESS, ANDREW MONCRIEFF, MARIANNA MONCRIEFF, BRENDA CUMMING THOM, GLENN ANDERSON, SHELLEY, ANDERSON, RAY HOOPER, MICHELLE HOOPER, BOB WHEELER, MARGARET WHEELER, BARRY HENDREN, GLENYS HENDREN, DENISE HORNER, KEVIN HORNER, PETER MURDOCH, EILEEN MURDOCH, LIZ HANISCH, BRUCE HANISCH, JACKIE LANE, BOB VENN, LYNNE VENN, CHRIS MCCANN, ANNE MCCANN, JOHN GERRITSEN, RACHEL GERRITSEN, PETER BRAY, MICHAEL PARSONS, JO-ANNE PARSONS, PAULINE LAWTON, ROD HUTCHINSON, GWEN LEDWIDGE, STEVE DODD, ROSIE DODD, RON SMITH, LYN SMITH, WILLIAM MCGOWAN, LYNDA WYSHART, STEVE ACKERS, LORRAINE ACKERS, DES BLAZELY, ANN BLAZELY, KEN RICHARDSON, MARGARET RICHARDSON, WARREN RUSSELL, LYN RUSSELL, BRIAN MURPHY, TRISH MURPHY, KAY HORNE, ALLEN LOWRY, LORRAINE LOWRY, GARY EVANS, CASSY EVANS, RAY LOUDEN, HELEN LOUDEN, BARRY WEBB, PAT WEBB, BRIAN HALLETT, IRENE HALLETT, COL ENGLISH, CATHY ENGLISH, DOUG BARBER, SHERRYL BARBER, WAYNE WARD, JENNY WARD, PETER NOLAN, JO NOLAN, MARK BRUSE, MARION BRUCE, DON COOKE, LEITH COOKE, BOB PODLICH, NARELLE PODLICH, THOMAS ZUPPERO, JAMES BROWN, CAROL BROWN, ROBERT STEVENS, SUE STEVENS, GLENN PARKER, JAN PARKER, JOHN MULLER, VALMA WROBLESKI, RUSSELL WORTHINGTON, JAN WORTHINGTON, TERRY BUCHANAN, GAYE BUCHANAN, KATHLEEN MONK, IAN SCOBIE, BOB HARTE, CAROL HARTE, TED BOULTON, JAN BOULTON, BILL ROSS, DIANA ROSS, JOHN HARTNETT, MARION HARTNETT, GEOFF HERBERT, LINDA HERBERT, WAYNE, OLIVER, TRISH OLIVER, TREVOR DICKINSON, JUNE DICKINSON, LINDSAY WIEDEN, RUTH WIEDEN, ROGER SKELLY, CHERELLE SKELLY, TERRY CUTLER, MARILYN CUTLER, RODNEY PHILO, HEATHER PHILO, GRAHAM HUMPHREYS, SANDRA HUMPHREYS, JOHN ORMOND, MARGARET ORMOND, GORDON ALBION, HELEN CLARKE, MIKE STONEMAN, GRAEME ALLAN, MARY ALLAN, GRAHAM STEELE, JUDY STEELE, SHAUN JAQUES, DENISE JAQUES, DIANNE BELL-NELSON, GREGORY SIEBENHAUSEN, VALERIE SIEBENHAUSEN, JOHN DUGGAN, RENY DUGGAN, ROY THOMAS, PAULA THOMAS, ROBYN TREMLETT, GEORGE TREMLETT, BARRY BOON, PAT BOON, RAQY VELVICK, HEATHER VELVICK, NIC PEARL, LYNNE PEARL, ANN FELLOWES, ALAN FELLOWES, DANIEL HOLLOWAY, DEREK HOLLOWAY, CHERYL HOLLOWAY, RICHARD MASEFILD, ALESSANDRO TAGLIENTI, FRED BLACKBURN, MARY BLACKBURN, BILL PARRY, JENNIE PARRY, RICHARD CIASTKOWSKI, MAUREEN CIASTKOWSKI, JOHN VRIESELKOLK, YASMINE VRIESKOLK, STANLEY BARNETT, CHERYL BARNETT, JOHN BLAMIRES, JULIE BLAMIRES, EVON TAYLOR, DAVID MURPHY, NOELYNE, JOHN MEEUWISSEN, VERN WATTS, ERIKA WATTS, GRAEME SULLIVAN, HELEN SULLIVAN, DAPHNE SPEECHLEY, PETER MCMAHON, CARMEL MCMAHON, MITCHELL MCADAM, RHONDA MCADAM, NORMAN WALMSLEY, ROBYN WALMSLEY, COLIN PYPER, LLOYD LAUGHTON, CHRISTINE LAUGHTON, LEONIE DALEY, COLIN HENNESSY, PAUL PROBERT, MARGARET PROBERT, RODNEY CUNNING, BEVAN STEPHENSEN, JANINE STEPHENSEN, WILLIAM MICHAELSON, IAN LORD, ALISON LORD, KEITH VOLKMER, BEVERLY MICHELS, SHOAL GALLAGHER, JANELLE CLARKE, GREG PERN, KAY PERN, LARRY TURNER, IAN KENNEDY, IAN JAMES PRICE, GARY BOARDMAN, PAM BOARDMAN, GARY OGDEN, JENNY OGDEN, CHRIS SMITH, THERESE SMITH, NEVEL OILETT, CATHERINE OILETT, RAYMOND SPIERS, CAROL SPIERS, CAROL BRUCE, TOM HULETT, CARMEL HULETT, JAMES PORTER, ALBY HAWES, EILEEN HAWES, JOHN LOMAS, ROZ LOMAS, JUDY FIZELL, PETER FIZELL, LINDLEY COPPER, DAVID CHRISTMAS, JO CHRISTMAS, PAMELA RANDALL, JOHN NATOLI, SUE NATOLI, TIM GUNSMAN, SANDRA GUNSMAN, RODNEY DAVIS, MALCOLM FLINT, KAREN FLINT, DENIS LORD, SUE LORD, BRUCE LINDNER, JEANETTE LINDNER, LUKE HOLCOMBE, DI HOLCOMBE, ERIK MAGNUSSEN, BOB BURGESS, GRACE BURGESS, RICK HILL, MARY HILL, RAYMOND MCNAMARA, BOB KINNELL, JAN KINNELL, TONY WHEELER, LIDWINA WHEELER, ECKARD DIETRICH, MONIKA DIETRICH, RON STEWARD, RHONDA STEWARD, IAN ELLIS, CHRISTINE ELLIS, OLIVER BEVERLY, CATHERINE BEVERLY, SUE SHUTTLEWORTH, DAVID SHUTTLEWORTH, DES PETERS, CAROL PETERS, FRANCIS BROWN, TONY HEAT, ANNIE HEAT, DENNIS GEOGHEGAN, JANET GEOGHEGAN, COLLEEN LYNN, MERV CURRIE, VAL CURRIE, DENISE HETRELEZIS, JENNIFER CROUMBIE-BROWN, ROD WILLIAMS, JAN WILLIAMS, NOEL PERROUX, GRAHAM BRASCH, GLENDA BRASCH, PETER KENMUIR, VAL KENMUIR, LAURIE WIFEN, JULIE WIFEN, KEN MARSCHENKO, KATH MARSCHENKO, ANDREW BELL, SHARON BELL, TREVOR RAPHAEL, JAN RAPHAEL, PETER CINCOTTA, DENISE CINCOTTA, KEVIN O'BRIEN, SANDY O'BRIEN, PHILLIP AUGUSTON, CAROLYNNE AUGUSTON, LOU WOLF, PAM WOLF, PETER, HOLGATE, WARREN SMITH, SARAH SMITH, PETER SPENCER, CAROL SPENCER, IVAN READER, ROBYN READER, JANET SMITH, CRAIG ALWAYS, LIBBY JOHNSTON, DEBRA DOWNIE, LINDA VANDERSANDE, GEOFF THOMAS, SANDY THOMAS, GRAEME CLARK, ANNE CLARKE, TONY GUARINO, JANE GUARINO, ROD NIXON, VERLEY NIXON, BILL BESHAW, MARGARET BESHAW, GED CATER, PAM CARTER, PAULA CAMERON, JOHN YOUNGMAN, VICKI YOUNGMAN, GRAHAM SONTER, MAURICE ANDREWS, BEV ANDREWS, PETER WESTCOTT, KERRIE WESTCOTT, MICHAEL CONNOLLY, TRACEY CONNOLLY, MONICA JORDAN, AMY MARGARET SWINDLEY, DEBORAH GENGE, ROSS EVANS, HELENE EVANS, TREVOR WALLER, DEREK NATION, HELEN NATION, DAVID SPENCER, WINSOME SPENCER, STAN BALDWIN, SANDRA BALDWIN, MICK BROWN, RIA BROWN, JEFF STRANGE AND LUCY STRANGE

Stonehouse, Hamer, Tassell & Ors v Serenitas Communities Holdings Pty Ltd [2022] QCAT 91 | Case summary | Zoe

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[1] The applicants in these matters are all home owners[1] in the residential park[2] known as RV Homebase Fraser Coast, RVHB of which Serenitas is the parkn owner.[3] The home owners own manufactured homes[4] which are positioned on sites in the residential park and Serenitas as the park owner owns the land, common areas and communal facilities built on the land. The relationship between Serenitas and the various home owners is subject to individual site agreements[5] in respect of the land on which their home sits and their use of the common areas and communal facilities. Each of the home owners must pay site rent[6] to Serenitas in accordance with their site agreements and there are provisions in the site agreements and the MH Act[7] for variations in the site rent. Serenitas exercised its right to perform a market review[8] of site rent in 2020 which resulted in the site rent which is inclusive of up to 15 Kl of water per month increasing from $169.88 per week to $196.98 per week in accordance with a notice of general increase in site rent[9] dated 25 February 2020.
[2] The home owners disputed this increase[10] and following the failure to find a resolution through negotiation[11] and mediation[12] they filed the applications in the Tribunal to have the Tribunal determine the dispute.[13] I note that the home owners have not disputed the compliance by Serinitas with the general requirements for site rent increases in ss 69A to 69E so the increase is not prohibited under s 69(3) of the MH Act. They are disputing the amount of the proposed increase on the basis it is excessive[14]. Each of the applications disputed the increase in the site rent on other grounds and while there are separate grounds set out in each and the requested outcomes vary the applications were heard together and so a single set of reasons and single outcome has been determined. I note that each of the home owners site agreements had the same clause in regard to site rent reviews and the site rent for each was the same prior to the increase and was increased to the same amount in accordance with notice of general increase therefore the decision made in respect of the applications should be the same having regard to s 69C of the MH Act which confirms that the site increase for all eligible sites will be increased on the same basis.
[3] Serenitas as required under the MH Act engaged a registered valuer to prepare a market valuation for the market review of site rent[15] to accompany the notice of general increase in site rent. The registered valuer, Mr Timothy O'Sullivan had consulted with representatives of the home owners prior to the preparation of his report.[16] Mr O'Sullivan's report dated 26 January 2020, which is the expert evidence in these applications, states that it was prepared on instructions from Serenitas to undertake a Market Site Rental Assessment in relation to RV HB and that it was prepared in accordance with the MH Act. The home owners have not provided their own expert evidence and have relied on their own views and cross examination of Mr O'Sullivan and Serenitas' representative Mr Forbes.
[4] The Tribunal in deciding the applications may have regard to the matters set out in s 70(5) of the MH Act and may make any of the following orders:

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[7] Mr O'Sullivan did not include Sugar Coast Village and Hazelmere as they were overall inferior though with higher site rent. He stated that they appealed to a different style of clientele. Mr O'Sullivan confirmed that there were no residential parks nearby RVHB in his report and later stated that "while it can be argued that it is in an inferior locality, it is the only MHRP in Maryborough and it does provide a wide array of communal facilities for home owners use as expected (and required) by the market at modern and high quality MHRPs. Additionally, the larger dwelling sites couples with an abundance of green space having been incorporated provides significant point of difference to other established communities which typically have smaller home sites of around 220m2 to 280m2, and utilise colourbond sheet dividing fences rather green fencing through hedges and plants which assist the properties overall market appeal."
[8] Mr O'Sullivan noting that there was a 15Kl a month water usage allowance in the site rent for RVHB calculated that based on the cost of water the allowance was worth $6.43 per site per week. There was one other residential park that had free water and the allowance was deducted from their site rent as well. Overall Mr O'Sullivan was of the opinion that the range of site rent was $185 to $200 per week and adopted a base market rent valuation of $190 per week. Stating that "this is considered to be a competitive market level in the local and wider catchment and recognises the modern, high quality nature of the subject. It also acknowledges the subjective differences when compared to other evidenced MHRPs such as location and their current passing site rent. The amount of the water allowance rounded to $6.50 was added to the site rent by Mr O'Sullivan to arrive at the market site rent of $196.50 per week.
[9] The applicants raised issue with the comparison residential parks not being in the same locality as RVHB, that is Maryborough and the standard and quantity of the communal facilities at RVHB not being the same as the other comparison residential parks. There were also issues raised about the activities described as burn outs at The Maryborough Speedway which is adjacent to RVHB. That it did not appear that the speedway was taken into account in the valuation in regard to locality and the impact of the burnouts in terms of noise and particulate pollution should be taken into account. Mr Stonehouse and Mr Hamer considered that the only appropriate way to review the rent at RVHB was in accordance with s 70(5)(c). they provided details of rent increases over the years and considered that the site rent should rise in accordance with figures form the RTA. Mr Tassell provided a quantity of photos with his application showing the differences between the facilities at RVHB and the comparison villages. He also set out the differences between what was provided at the comparable villages and RVHB and submitted that the rent should be lower. Issues were also raised in regard to the calculation of how the water allowance should be taking into account and that effectively it may be being charged for twice if there is a separate component for it,
[10] Serenitas, in its response, and Mr Forbes, in his affidavit, made it clear that the locality which was considered for the purpose of the market rent review was the Fraser Coast region. This was described by Mr O'Sullivan in his affidavit as the Wide Bay-Burnett area and taking into consideration the areas of Hervey Bay, Bundaberg and Bargara. Mr O'Sullivan stated that "like the Sunshine Coast and Gold Coast area these are regions that attract retirees to them and prospective home owners when looking to purchase within a MHRP do compare the projects/communities throughout the region depending upon their personal requirements". He had earlier said that "the definition of location can have many different meanings depending upon the asset class. That when considering a unique and "purpose built" asset, often a larger comparison area is required. This may be a region or nationally. This is particularly prevalent in regard to MHRPS as they are a unique from of asset/property". Mr Forbes noted that Maryborough and Hervey Bay are twin cities and Mr O'Sullivan provided a table comparing the facilities and services available at RVHB and each of the comparable villagers and noting that it provided all of the relevant services. Serenitas and Mr Forbes set out in great detail all of the facilities and services in the areas surrounding RVHB which were available to the home owners. In regard to the Maryborough Speedway it was stated that it was constructed many years before RVHB and it was specifically dealt with in the site agreements and that the burnouts were an issue that the home owners should take up with Council.
[11] Mr O'Sullivan stated in a supplementary report filed with his affidavit in the Tassell application that "As is demonstrated above, whilst the comparable MHRPs are arguably situated in superior locality types i.e. coastal communities, when taking into consideration other locality and property specific matters, the subject on balance is competitively located to critical services. In particular when compared to Palm Lakes Resort Bargara which is considered to provide superior communal facilities in comparison to the subject (and all MHRP's in the region) but is substantially further away from many critical services, the subjects assessed market rent at $190/site/week is at a discount of $7.58/site/week (advised $197.58 following a 3.5% increase on 1 July. Mr O'Sullivan stated in his supplementary report in regard to the +Speedway that it is an external market issue and has been implicitly reflected in the assessment when considering the subject's location. Whilst it was acknowledged that general living disruptions may occur when the speedway holds events, as advised home owners, the existence of the facility pre-dates the establishment of the subject. As such it is considered to be a known element in the wider community and would have been appropriately contemplated at the time of purchasing a dwelling as part of the typical due diligence process when assessing any real estate opportunity. It is difficult to accept that the speedway is a matter of significant concern, given that all home sites within the property have sold overtime, with resales also occurring demonstrating the established and ongoing appeal of the subject.
[12] During cross-examination after the wording of s 70(5)(a), (b) and (c) was read to him Mr O'Sullivan confirmed that he had relied on s 70(5)(a) though later saying it may have been appropriate to use s 70(5)(b). He also confirmed that you could not directly compare the value of land in Hervey Bay with that in Maryborough and that an appropriate allowance for the difference in locality would be between $5 and $10 dollars per week. In re-examination he confirmed that if RVHB was moved to Hervey Bay the rents would be higher. When taken through the photos provided with the Tassell application Mr O'Sullivan acknowledged that facilities in the compared villages were of a higher standard to those at RVHB and that there were a number of facilities which some had which RVHB did not have,
[13] Serenitas submitted that the locality of a residential park cannot be prescribed by any fixed rationale, but instead depends on the residential park in question. That is, the locality may be a small area where there are a number of residential parks in the immediate locality. Conversely, the locality may be a larger or broader region where there are no or insufficient residential parks in the immediately locality. In this regard, it must be remembered that residential parks are not a prolific form of development, as opposed to say residential housing where a much more confined view could be held. As a result a broader view of the relevant locality is justified." The decision in Hammond Village Pty Ltd v Residents of Hammond Villages[20] is cited "locality is not defined in the Act. Various dictionary definitions refer to: a particular neighbourhood or area; a surrounding or nearby region, relating to a town or small areas rather than the whole state or country. The Tribunal is inclined to the view that one of the factors relevant to the question whether this term is given a narrow or wide interpretation is the number of comparable parks in the immediate vicinity of the subject park. That is if there are sufficient parks in the immediate vicinity of the subject park to give a reasonable range of sensible comparison, it is not necessary or appropriate to widen the concept of locality to include parks which would not normally be regarded as in the immediate vicinity, and which thus do not share the particular circumstances or characteristics pertaining to parks in the local area."
[14] The decision in Hammond was decided based on an earlier version of the MH Act in which s 70(3) was the operative provision and the provisions in regard to comparative parks was limited to s 70(3)(a) as follows

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[15] There is therefore no provision for comparable localities, and it therefore becomes an exercise of expanding the size of the locality in an endeavour to locate comparable parks as described in the decision of Hammond. I note in that decision that the member found that there were comparable parks in the locality and excluded other parks outside of the locality which the valuer, Mr Brown had relied upon to found his market valuation. Finding that "on the face of Mr Brown's valuation and his oral evidence, his site rent valuation is not founded on the expressed criteria to which the Tribunal may have regard, and his valuation of weekly site rent of the Village of $128 is not accepted." Ultimately the Tribunal accepted the valuer's evidence in regard to comparable parks within the locality and that the fair market site rent was $120.
[16] There were a number of other decisions cited by Serenitas which decided that the relevant locality for a residential park located on the Sunshine Coast was the Sunshine Coast Region. The Residents of Edgewater Village v S J Tickle & Sons Pty Ltd & Budfield Pty Ltd[21] concerns a site rent dispute in respect of a park at Bli Bli. The members stated that The Tribunal's task is to have regard to the matters specified in s 70(3) (now s 70(5)) of the Act in deciding whether or not the proposed rent increase is excessive. The Tribunal noted that the park owner had considered rents and facilities at parks in the area form Hervey Bay to the Gold Coast and they said they did so because this is the most concentrated area in Australia for home parks and these are their competitors in a market which draws customers from all over Australia and from New Zealand. The Tribunal held that "However, the comparison specified in s 70(3)a) of the Act is to be of site rents in other parks "in the locality". The ordinary meaning of "locality" suggests a more restricted geographical area than that used by the respondent. The Tribunal accepts the view of the applicants that, for practical reasons, the three local government areas comprising the Sunshine Coast are appropriate. They have close locality links and this grouping permits a realistic comparison of comparable parks. The Tribunal then determined which parks within the locality were most comparable to the park in question.
[17] Another of the decisions in regard to the Sunshine Coast cited by the park owner is Residents of Alex Beach Park as listed in attachment to application lodged 14 November 2005 v W & T Enterprises[22]. The member in that case did find that there was no dispute that the locality was the Sunshine Coast based on the evidence of the experts for each party. The park owner's expert determined that the location of the park close to Alexandra Headland beach meant that there were no comparable parks. The Member held "I do not accept that the park cannot be compared with other parks. I prefer Mr Sergiacomo's view (home owner's expert) that location is only one consideration to be taken into account when comparing manufactured home parks. Mr Sergiacomi in his report gave weight to location but he did not give the very significant weight that to location given by Mr Duncan. I agree with Mr Sergiacomi that for many people facilities are more important than location. I do not accept in the case of the subject park that its proximity to the beautiful natural features of Alexandra Headland Beach necessarily overcomes the shortcomings in facilities which I have found exist at the park, when a determination of a fair and equitable site rent is concerned."
[18] The member in Residents of Alex Beach went on to state "I consider that the term "comparable" used in s 70(3)(a) means "broadly" comparable, not "exactly" comparable. In determining the fair market site rent, the factors of location and range of facilities have to be assessed and then balanced one against the other to form a view as to the overall amenity of the park. In determine the weight to give to location in the balancing exercise, the proximity to a river, lake, beach or other natural feature and whether there are water or other views need to be taken into account."[23] Serenitas also cited the decision in Palmpoint Pty Ltd v Wiseman & Ors[24] in regard to comparing parks. In that case it was held "A comparable park does not mean it is identical in every respect. The services and facilities offered at the parks vary slightly but they must be manufactured home parks offering similar facilities."[25]
[19] Serinitas cited several cases in regard to the process of determining a market rent firstly Jarvis v Lewani Palms Resort Pty Ltd[26] where it was stated "A market review involves a complex assessment of a range of factors. A market review rent is certainly not able to be established by the application of any mathematical formula. No calculation in a mathematical sense is involved. It is, in the end, a subjective assessment based on objective facts. There was also the decision in M & T Entriken Pty Ltd v Nicholson & Ors (No2)[27] where it was stated "The determination of site rent is not a precise science." There were two other matters dealt with in that case. It was determined in the first appeal decision in that matter[28] "that the Tribunal was required to have regard to site size in accordance with s 70(3)(a) of the MH Act as it then was"[29] and "that s 70(3) now s 70(5)of the MH Act is past focussed. The word previous occurs in several sections and that the starting point for the Tribunal must be the fact and circumstances that existed a at increase day".[30]
[20] As stated above the home owners did not provide their own expert evidence they did provide statements setting out there concerns in regard to the use of residential parks which they considered to be outside of the locality of RVHB and Mr Stonehouse and Mr Hamer made submissions that s 70(3)(c) general trends in residential rents should apply as there were no comparable parks. In Mr Tassell's case they visited the parks set out in Mr O'Sullivan's report and took extensive photos and sought to compare the nature and quality of the communal parks and made submissions on how the site rent at RVHB should be assessed having regard to the differences. Submissions were also made about the way Mr O'Sullivan separately calculated and included a fixed amount for the water allowance of 15 KL per month. There was also extensive cross-examination by the applicants of Mr O'Sullivan and too lesser degree Mr Forbes by the applicants.
[21] Serenitas also submitted that, "The applicants have not filed any expert evidence. The applicants are not qualified valuers and have no valuation expertise, Mr O'Sullivan's expert evidence is therefore uncontested, it is "very difficult for the Tribunal to make findings contrary to the expert, particularly when the Tribunal has not inspected the park or the comparable parks" and the home owners are restricted to attacking the factual basis upon which the report stands."[31] Serenitas submitted that the applicants seek to point to differences with respect to facilities and the locations of the comparable parks, but these features and attributes were already taken into account by Mr O'Sullivan in performing his analysis and arriving at his determination. And arriving at his determination (supplementary report). That the applicants have not credibly diminished the quality of Mr Sullivan's evidence by their own evidence or during cross-examination at the hearing and that Mr O'Sullivan's evidence is to be preferred. It is noted by Serenitas that the applicants did not suggest any other comparative locality that ought to be considered.
[22] Mr Stonehouse in response to this stated that they had filed evidence from Hon Bruce Saunders MP, in regard to locality and that they dismissed the notion that Mr O'Sullivan's evidence was uncontested. In regard to cross examination he noted the questioning by the Member in regard to locality and that he was shown photos of other village facilities which he admitted to being of a superior standard than those at RVHB. Mr Stonehouse submitted in regard to the applicants not suggesting any other comparable locality that is because there isn't one. We argue that s 70(5)(c) should have been the most appropriate cause given that both locality and comparability was not an appropriate option for consideration. He also noted in regard to "determining the weight to give location in the balancing exercise.... river, lake or other views etc?" One can only wonder how a boundary fence shared with a speedway and an auto wrecking yard can be compared with water views and natural features.
[23] Mr Hamer raised issues with the independence of Mr O'Sullivan as he was engaged and paid for by Serenitas and that he should not be considered an expert. In that regard I not PD No 4 of 2009 which it clear that an expert owes a duty to assist the Tribunal which overrides any obligation to any party to the proceeding. That Mr O'Sullivan had admitted under cross-examination that he had made errors in his report and that comparison of parks for rent increases may need to be carried out differently in the future. He refers to the objects of the Tribunal in regard to Serenitas' submission that without expert evidence form the applicants Mr O'Sullivan's evidence should be preferred. That this would result essentially in a rent set by a valuation report, at any park, not being able to be questioned whatsoever by any home owner without their own expert's valuation report and that this submission should be rejected. In regard to the submissions of Serenitas that the locality is the Wide/Bay Burnett region Mr Hamer notes that Mr O'Sullivan's valuation report where he confirms that the Maryborough locality is indeed inferior to the localities of the comparison parks. Additionally, Mr O'Sullivan agreed during cross examination that the localities were quite different. Mr Hamer notes the submission that the applicants have not suggested any other localities and states this suggests that the "expert" should have been assisted by the applicants who could identify another locality where the valuer could not, and in fact does not exist. Mr Hamer submitted that the fact the park is located in an inferior locality was not considered by Mr O'Sullivan in his report and he admitted this under cross-examination. He also admitted under cross-examination that the localities were different and he had not taken into account may of the differences in the localities. Mr Hamer submitted that the cases cited by Serenitas were irrelevant because3 they concerned other localities.
[24] Mr Tassell submitted that Mr O'Sullivan admitted he did not compare or consider the land value of RVHB compared to land values at Hervey Bay. He further admitted that the land value at Tinana would be considerably less than land value at Hervey Bay. That Mr O'Sullivan admitted under oath that RVHB is a unique Lifestyle Village for which there is no direct comparison, knowing there was no direct comparison between RVHB and the other comparables. Mr O'Sullivan formulated his market site rent assessment to reflect there was a comparison, he did acknowledge RVHB was in an inferior location however he did not take that into consideration when comparing RVHB with the compared locations. Mr O'Sullivan admitted in cross-examination that in his professional opinion, the rent payable at RVHB should be $5.00 to $10.00 per week less than that of Palm Lake resort Bargara because of similarity in location to a large services community. Serenitas submitted that this amount referred to what Mr O'Sullivan thought about established and modern parks in Hervey Bay. Mr Tassell submits that s 70(5)(a) is in place to permit comparison of sites where there is a nexus of location, amenity and services and that where the differences are significant the margin of error in subjective judgment is significantly greater and therefore the result less reliable and that this must be why s 70(5)(b) and (c) are provided under the Act. That is to be more relative by comparison within the location thus having a lesser margin for error providing a more reliable result. That for Mr O'Sullivan to fail to acknowledge in his report the presence of these sections of the Act, gives rise to the professionalism of his approach and confidence in the outcome based on balanced assessment. In regard to Serenitas' submission that the applicants did not suggest any other comparable locality Mr Tassell sets out the fact that RVHB is a unique in its design and purpose as a recreational vehicle park and that the facilities were designed and constructed in accordance with the purpose of the village, to provide very basic facilities for residents and a secure garage to park their RV's. He submits that at the time of the current Market Rent Review RVHB was the only dedicated and completed recreational vehicle MHRP in Queensland. That is one justification a comparison under s 70(5)(a) is inappropriate, there is no other village like RVHB in Queensland. Mr O'Sullivan admitted in cross examination he only considered the provisions of s 70(5)(a) of the Act. He also admitted he should have considered section 70(5)(b) and (c). Nowhere in Mr O'Sullivans report did he consider the social demography between Maryborough and the coastal seaside resorts located at Hervey Bay and Bargara.

[32]

[25] It must be remembered that "The task of the Tribunal is not to determine the market rent. Its task is to determine whether the proposed increase in site rent is excessive." The Tribunal will invariably consider the market rent in that regard, but it must consider those factors as set out in s 70(5) of the Act which prescribe specific considerations within the context of determining 'whether the increase is fair and equitable in all the circumstances of the case"[32] The market rent valuation of Mr O'Sullivan is therefore part of the evidentiary matrix that the Tribunal has regard to in determining the question at hand. The object then is not to prove that the valuation is correct or not but how it will be taken into consideration in determining the question of whether the market rent is excessive.
[26] It is not a question of whether or not Mr O'Sullivan's or Serenitas' characterisation of the locality is correct. It is for the Tribunal to determine what is the locality of RVHB. This is made clear in the decisions referred to by Serenitas. In those cases the Tribunal determined the locality and which parks were part of the locality. While locality appeared to be capable of expanding as a result of the decision in Hammond and that in Alex Beach and Edgewater the locality was a whole region, the Sunshine Coast. Those cases were decided under a different provision which did not enable a consideration of comparable localities. It is clear from the current version of s70(5)(a) that it refers to the locality of the park. That means that it should not be necessary to consider locality as an issue requiring comparison as all parks will be in the same locality. Mr O'Sullivan as submitted by the applicants and accepted by Serenitas stated in his report that RVHB was in an inferior locality to the comparable parks. Serenitas cited the decision in Daleside for the proposition that without the applicant's producing expert evidence the evidence of Mr O'Sullivan is uncontested. The facts in Daleside were similar to those here in that the park involved was in Beaudesert and the comparison park were much nearer Brisbane. This was raised by the home owners and the member stated "it would appear that in reality, they are only used as comparable parks because they are the closest to the park, although I do not think they are in the "locality" of the park, as referred to in s 70(3)(a) of the Act. The member later stated "I do not see how I can overturn Mr Brown's expert opinion without countervailing expert opinion." With respect it is clear form the earlier cases that the Tribunal had done just that in Hammond when the expert valuer had relied on parks outside of the locality to justify an increase in site rent. The expert's evidence is in regard to the parks which they have had regard to in formulating their opinion in respect of market rent.
[27] The applicants have raised the issue of whether the comparable parks used by Mr O'Sullivan are in the locality of RVHB and submitted that they are not and for that reason s 70(5)(c) should be used as there are no parks in the locality and that in fact there are no comparable parks to be found due to RVHB being unique. This was in particular Mr Stonehouse and Mr Hamer who set out in great detail the differences between Maryborough, Hervey Bay and Bargara. Mr O'Sullivan accepted this when he stated in his report that RVHB was in an inferior locality requiring that there be a comparison of the localities in which the comparable parks are located. He also in cross examination accepted that there were differences in the localities and he should have given consideration to s70(5)(b) and (c).
[28] The decisions of Hammond, Alex Beach and Edgewater make it clear that when referring to locality the MH Act is contemplating the physical locality of the park. This is not related to comparative services as set out in Mr O'Sullivan's supplementary report or the relative competitive market for RVHB, in that potential home buyers look at residential parks within that locality, the Wide Bay-Burnett region, when making their decision to purchase. The locality of RVHB is Tinana, which is an outer suburb of Maryborough and it is common ground that there are no comparable parks in that locality. Therefore s 70(5)(a) of the MH Act does not apply.
[29] Mr Stonehouse and Mr Hamer submitted that in that case s 70(5)(c) should apply and the consideration should be given to general trends in rent for residential accommodation in the locality the park is in. They asserted that the localities of Hervey Bay and Bargara used by Mr O'Sullivan were not comparable localities and s 70(5)(b) was not applicable. As set out above comparable means "broadly" comparable not "exactly" comparable and a comparable park does not mean it is identical in every respect. The services and facilities offered at the parks vary slightly but they must be manufactured home parks offering similar facilities.
[30] The applicants have not provided expert evidence that the localities are not comparable. I accept that the localities are not the same and therefore consideration will need to be given to how the differences in locality in respect of the residential parks set out in Mr O'Sullivan's report needs to be taken into account in the comparison of the parks in accordance with s70(5)(b) of the MH Act. The applicants also did not provide any expert evidence as to how s70(5)(c) would apply and therefore I will not consider that section further as I am satisfied that it would require expert evidence to satisfy me what constituted general trends in rent for residential accommodation. I note Serenitas' and Mr O'Sullivan's submission that the Tribunal should not have regard to rental accommodation and say that the MH Act contemplates having regard to such evidence and when it is provided from an expert then it should and would be taken into account where necessary.
[31] I accept Serenitas' submission that the applicants did not make any submissions about any other comparative locality that ought to be considered. Maryborough is a regional city and the applicants could have obtained their own expert evidence in regard to whether there were any comparable parks in other regional cities. Without that the Tribunal is left with the parks which were nominated by Mr O'Sullivan. It is accepted by Serenitas that there should be a $5.00 to $10.00 adjustment for established and modern parks in Hervey Bay. Serenitas submitted though that, while Bargara is a coastal locality, it is not proximate to essential services like RVHB is, which balanced out the locational differences between the two, such that it was reasonable to consider Bargara in the comparison. Mr O'Sullivan in cross examination accepted that the value of land in Maryborough could not be directly compared with the value of land in Hervey Bay and in re-examination that if RVHB was moved to Hervey Bay the rent would be higher. In his supplementary report Mr O'Sullivan noted that after an increase in site rent at Palm Lakes Resort Bargara to $197.58 in July 2020, RVHB was at a discount of $7.58 per week before the water allowance.
[32] Mr O'Sullivan provided the following evidence mentioned above in regard to comparable location in his market site rent assessment and supplementary report:

[36]

[36] Mr O'Sullivan described RVHB as a modern, fully developed and purpose-built MHRP. The MHRP comprises 280 sold and occupied home sites. Extensive communal facilities are provided for the home owners which includes a centrally located community centre, a 4 hole chip and putt golf course, workshop, arts and craft building, RV wash bay, lawn bowls green which has a retractable cover and floodlights, gymnasium/fitness centre, tennis court, an outdoor 25 metre heated lap pool, putting green, dog wash, pickle ball court, croquet lawn, fire pit and barbeque kitchen area, dog off-leash areas, second smaller swimming pool and a recreation hut/gazebo known as the "Lakeside Centre". The Community Centre was said to feature a large open plan multi-purpose area, library, manager's office, meeting room, semi-commercial grade kitchen, bar with servery counter, billiards room and amenities. The land area of the property was 33.89 hectares with an undulating topography throughout, is extensively landscaped and features three retention basins. The Lakeside Centre also included additional pizza ovens and barbeques and occupies an elevated position overlooking the water retention basin system. There was also a full description of the RV Wash bay. Photos were provided in Mr O'Sullivan's report of the facilities at RVHB. Mr O'Sullivan stated in the report that at the time of inspection, the communal facilities appeared to have been well maintained and presented in a modern and good quality condition commensurate with their age, reflecting the materials used at the time of their construction and fair wear and tear. Mr Forbes in his affidavit provided further details in regard to the amenities at RVHB and added in services such as RV Rescue while home owners are travelling, MyEmergencyDR a telemedicine service. An RV dump point to enable home owners to dispose of black waste upon their return home from travelling and a village bus and trailer. A 12 bay concrete hardstand caravan parking for guests for up to 48 hours.
[37] Mr O'Sullivan described the facilities at the comparable parks as follows:

[37]

(a) Palm Lakes Resort Hervey Bay a semi-modern MHRP, which is fully developed with 209 sites. Communal facilities includes a centrally located community centre, a covered lawn bowls green, outdoor swimming pool, tennis court, barbeque gazebos and a small caravan storage area. The community centre comprises a porte cochere, formal entry, computer kiosk, library, large open plan area a lounge area, dining area, and timber dance floor, kitchen with servery bar, craft room, indoor swimming pool, spa and sauna, gymnasium, billiards tables area, male and female amenities and various outdoor alfresco areas. The park has an internal lake system. Mr O'Sullivan opinion was that whilst the communal facilities are modern, there are a number of subjective differences which overall we hold the opinion they are considered to be generally comparable to the subject.
>
> (b) Palm Lakes Resort Bargara a semi-modern MHRP which is fully developed with 378 sites. Substantial communal facilities are provided for the residents which includes an outdoor pool and spa, 2 covered lawn bowls green, 2 tennis courts, putting green, a smaller club house comprising a bar, dining, kitchen, lounge and games/craft area, a RV wash bay, hair salon, workshop and a larger designated community centre which includes an indoor heated swimming pool, sauna, cinema, large open plan multi-purpose area comprising a dining and lounge area, billiard tables, dance floor with stage, library room and commercial grade kitchen. Situated adjacent the community centre is a gold range simulation room and arts and craft rooms in a freestanding building and also a freestanding gymnasium and outdoor lap pool. Mr O'Sullivan's opinion was that whilst the communal facilities offered are modern and expansive in size and amount and are arguably superior in that regard, they are reflective of the significantly larger community that they service and also reflect that particular park operator's business and brand model.
>
> (c) Golden Shores a larger, older style and established MHRP with 353 sites. Extensive communal facilities for residents are provided which include an uncovered lawn bowls green, indoor swimming pool, gymnasium, outdoor pool, putting green, tennis court, barbeque amenities, workshop and community clubhouse which comprises large open plan muti-purpose area, dance floor. Mr O'Sullivan's opinion was that whilst similar types of communal facilities are offered, they are not the same amount and quality as the subject and are considered to be inferior in that regard.
>
> (d) Sugar Coast Village an older style and significantly smaller MHRP with 80 sites. Nominal communal facilities are provided for the residents which include a community hall with full kitchen facility, barbeque area, in-ground swimming pool, spa, sauna, gym. Mr O'Sullivan consider the community to be inferior.
>
> (e) Hazelmere Village older style, and established MHRP with 101 sites. Communal facilities provided for home owners includes an outdoor pool and spa, outdoor lawn bowls green and community hall which comprises an open plan layout and provides a library area, kitchen TV and lounge area and a billiards to name but a few inclusions. Mr O'Sullivan considered that there were minimal and older style communal facilities and overall the community was inferior.
>
> (f) Latitude 25 a new MHRP currently under development with 31 sites and 250 on completion. Extensive community facilities are proposed to be provided for the residents which includes a centrally located clubhouse community centre, wellness centre, tennis court, partially covered lawn bowls green, residents workshop/shed, outdoor pool, bbq facilities, dog off-leash area, golf putting greens and walking paths. Presently the workshop, drive through washbay and the community centre are available. Construction oft eh wellness centre, pool, tennis court, lawn bowls green and pickleball courts has commenced and are due for completion in December 2020. Mr O'Sullivan opinion was that it was a modern and developing MHRP being developed as a similar concept to RVHB with generally larger site sizes in comparison to other MHRPs. He notes that Stage 1 is complete and is a more dense development setting in comparison to the subject i.e minimal greenspace between home sites. Overall he said the community is considered to be comparable, however note that it is a developing project in a highly competitive MHRP market at present and we consider that the current weekly site rent reflects this amongst other factors in order to maintain project viability and sales rates.

[38]

[38] Mr Tassell in his application provided extensive information about the facilities at the various parks including photographs to compare the facilities at the other parks to those at RVHB. He considered that the market rent review paints a picture that RVHB facilities are equal to, or in some cases, of a superior standard and or quality of those in the compared villages. He believed the facilities in the compared villages were insufficiently described to lessen their feature differences to that of RVHB. That the facilities were constructed to suit an entirely different clientele and are thereby of a different standard. He gives the example of purpose built movie theatres at some villages compared to the pull down screen in the community centre at RVHB. The facilities at each of the compared villages were inspected by a group from RVHB and comments on each of their facilities with photographs were set out in the application. It was noted that some villages provided a free weekly meal voucher valued at $13. Mr Tassell provided his submission as to what the RVHB site rent should eb in relation to the comparable parks having regard to their facilities. I accept the submission of Serenitas that Mr Tassell nor any of the applicants he represents are able to give such expert evidence.
[39] Mr O'Sullivan responded to this in his supplementary report stating that he had visited the comparison communities on a number of occasions over many years. He emphasised that no two MHRP's are directly the same of comparable, as each has different or unique features and attributes which separate them apart and the comparison exercise that was undertaken took into account these different features and attributes in ascertaining the market site rent assessment, he says that the applicants do not acknowledge that the subject itself has a number of positive attributes not evident at the comparable MHRPs. Matters such as a 4 hole chip and putt course, a substantial sized firepit and barbeque kitchen area, wider road widths and driveways, larger site sizes, more greenspace areas, pickleball court and significant sized individual metal and wood workshop area are all unique to the Subject. Whilst RVHB has been developed in a particular manner and improvement standard, it remains comparable albeit with different features. Mr Forbes in his affidavit relied on Mr O'Sullivan's evidence noting that the applicants' views are contrary to his expert evidence. Reference is made to over and above services which exist at RVHB set out in the response and Mr Forbes' statement and that they were refuted by the applicants. I note that Mr O'Sullivan submitted in regard to the applicants raising the free meals at some facilities that they were not part of the site agreement and should not be considered as part of the market review. I consider in that case the over and above services at RVHB fall into the same category. Mr O'Sullivan states whilst we include in our report a number of MHRPs from the area, the assessed site rent at $196.50/site/week (including the water usage allowance) when adjusted to be on a like for like basis excluding the water usage allowance with the comparison MHRP's is equivalent to $190/site/week, which sits at the bottom end of the evidence range for the relevant comparable fully developed communities, this is irrespective of the fact that there are two inferior communities (Hazelmere and Sugar Coast MHRPs) which evidenced significantly higher current site rents than that assessed for the subject. This equivalent rate reflects discount range of between around $1.00/site/week (Bargara located MHRP) to $13/site/week (Hervey Bay located MHRP including only standard sites at Golden Shores) when considered against the considered comparable parks. Limited regard was had to Latitude 25 as it was only partially developed and it was noted that there was a new site rent there of $195/site/rent as at September 2020 due to its imminent completion.
[40] Mr O'Sullivan was questioned extensively at the hearing in regard to the facilities at the various parks and taken through the photos contained in Mr Tassels' application. Mr Stonehouse stated in his final submission that the comparable properties that Mr O'Sullivan provided in his MRR to gauge proved to be not comparable after he was shown various photographs which clearly identified a vast difference in the standard of properties which he had used to compare against RVHB. Serenitas in its submissions accepted that "while the photographs shown to Mr O'Sullivan did illustrate items of a better quality nature, that is just one thing to be considered. Indeed the applicants do not refer to the facilities and services that only they have, or that are better in quality or offering. It is noted that the determined market rent sits at the bottom of the range of site rents considered.
[41] Mr Tassell stated in his submissions that Mr O'Sullivan admitted that the facilities in the compared villages were of a higher standard to those at RVHB and that they had a number of facilities that RVHB did not have. That Mr O'Sullivan had admitted under oath that RVHB is a unique lifestyle to which there is no direct comparison. That the facilities at the other villages were constructed to suit an entirely different clientele who generally live all year round in their homes and are thereby provided with a different standard of facilities. Mr Tassell submitted that after viewing photographs taken of numerous RVHB facilities and similar facilities at the compared villages Mr O'Sullivan admitted that the RVHB facilities were not of equivalent standard. When questioned regarding the quality of the facilities he confirmed they were less than average when compared to like for like facilities at the compared villages. He also admitted that the other villages had more community facilities including commercial kitchens and dining rooms. Serenitas made the same general submissions in regard to facilities as it did to Mr Stonehouse. In regard to the kitchens it was noted that it was larger than Golden Shores but smaller than Palm Lake and Latitude 25 as they are designed for more regular use. Mr Tassell notes in his final submissions that the facilities at RVHB were designed and constructed in accordance with the purpose of the village, to provide the very basic facilities for residents and a secure garage to park their RVs. That the photographic evidence of the facility's features and attributes clearly depict the comprehensive difference between the compared villages and RVHB. That Mr O'Sullivan's evidence was flawed and should not be preferred.
[42] Mr Hamer did not make any specific submissions in regard to the facilities at the comparable parks as his primary submission was that only s 70(5)(c) of the MH Act should have been considered.

[40]

[44] Part of the comparison process undertaken by Mr O'Sullivan noted that in some MHRPs, specifically RVHB and Golden Shores, there was an allowance for water included in the site rent. He said that it was a critical area of consideration related to a water usage allowance either being included or excluded. As mentioned above in the case of RVHB it was 15KL per month and in the case of Golden Shores it was unlimited. Mr O'Sullivan took the price of a KL of water and calculated that at 15 KL per month the added value/included benefit of water usage within the current site rent component for water usage within the current site rent equates to $6.43/week/site at the monthly usage allowance. Both RVHBs and Golden Shores which had unlimited water usage site rent was adjusted by this amount. After Mr O'Sullivan's comparative exercise where he found that RVHB was at the bottom of the range he then added back the water allowance which he rounded up so that the market site rent became $196.50 per site per week.
[45] Mr Stonehouse submitted after setting out Mr O'Sullivan's explanation of the water usage allowance at the hearing that this is an RV village where many residents travel for long periods of time, therefore how can it be fair for one to be charged for water that they don't use. It became apparent that the RVHB's park owner does not carry over that allocated monthly amount of 15KL if unused and so it would appear that the park owner would further financially benefit from this incorporated fee. Mr Hamer similarly submitted that the applicants do use anywhere near the water allowance as they travel up to 6 months of the year and are therefore paying for a utility cost not used. The water cost being included in the rent amount will disadvantage the applicants as these costs will be increased for CPI and future market reviews and which increases likely will not relate to the costs, nor the applicants actual usage. Mr Tassell submitted Mr O'Sullivan had agreed during cross-examination that the current site agreement included a water component of up to 15Kl per moth and payment was already included within the current site rent agreement. He also agreed that adding an additional payment of $6.43 for water amounted to the residents paying twice for the water allocation and therefore the park owner could be in breach of s 99A(2) of the MH Act.
[46] Serenitas submitted that Mr O'Sullivan considered the value of the 15KL water allowance included in the site rent because it is a significant benefit that is not included in the site rent rates payable at all comparable residential parks (except for Golden Shores) and because in the market this is usually a cost borne by home owners separately. He explained the adjustment process as deducting the value of the 15KL water allowance form the site rent so as to arrive at a 100% water exclusive site rent. Then use that rate for comparison purposes with the comparable parks. Then the 15KL is added back so as to convert the 100% water exclusive site rent rate back to 15Kl water inclusive site rent rate that is an agreed term of the site agreement.to not performed the final step would unilaterally alter the terms of the agreement it would only not be performed where water was being converted to a 100% user basis under s73 of the MH Act. Serenitas gave an example of where a valuer is asked to value apartment A which is fully furnished and includes a new car. Apartment B and C were recently sold, but neither was fully furnished or came with a new car. The prices of B and C cannot be directly compared to Apartment A without some adjustment. The apartments can be compared to begin with to arrive at value for A, but the figure then needs to be adjusted by the value of the furniture and the new car to arrive at its true market value. The process is therefore not undertaken to artificially inflate the increase, but is undertaken so a proper comparison can be performed. It was submitted that it was irrelevant whether the 15Kl water allowance included in the site rent is sued. This is no different to the site rent including non-exclusive of communal facilities for 365 days a year, and if a home owner uses the facility for 1 day or 365 days makes no difference to the site rent paid. What is relevant for market review purposes is the value of the significant benefit that is included in home owners site rent, being the 15Kl water allowance, that cannot be ignored in the comparison exercise. This sum it is not "charged" for water - rather it is the value of the service that is included in the site rent. Serenitas stated that Mr O'Sullivan did not agree during the hearing that residents were paying twice for water and did not comment about s 99A.

[41]

[47] I note Serenitas' earlier submissions in regard to the process of determining a market rent which showed that it was a complex assessment of a range of factors and not able to be established by the application of any mathematical formula. That no calculation in a mathematical sense is involved and is a subjective assessment based on objective facts. Further, that the determination site rent is not a precise science. It is therefore surprising considering all of the different factors involved in the market rent review in regard to locality, sites and parks Mr O'Sullivan decided to perform a mathematical calculation in regard to the water allowance based on an assumption that it was appropriate that each home owner was be charged for the consumption of 15 KLs of water whether or not they used that amount. While Serenitas described it as a service and likens it to the availability of other communal facilities and that it irrelevant whether it is used or not. The difference is that those facilities just like the furniture and car in the example have been provided and it is irrelevant whether they are used as they are available for use. Whereas the water is a consumable which is available for use and it will only be provided when it is consumed. I note that each of the manufactured homes are metred for water use and if the 15 KL allowance is exceeded the home owner is charged for the excess water use. I do not consider it appropriate to separately calculate the value of a component in the site rent and then add it on. If the home owners were to be charged for 15KL of water whether they used it or not that would not be a benefit for them and they would be better off having the water separately billed. This of course would create an administration cost for the park owner in having to prepare a bill for water use each month or quarter. The 15 KL water allowance is something that must be taken into account in arriving at market rent but not as an add on component where the result is that the home owners are effectively being charged for an amount of water they may not have used. I accept the applicants' submissions in that regard. I also note that having regard to the way the market site rent component for the water allowance was calculated by Mr O'Sullivan there may be an argument in regard to the application of s 99A of the MH Act.

[43]

[48] Overall having regard to factors of location and sites and communal facilities it is clear that while RVHB does have an advantage in site size and the greenspace within the residential park against the comparison parks they are all in superior locations and have facilities which are superior in terms of like for like facilities. The most superior residential park is Golden Shores which is in central suburban location in a coastal city and has proximity to major shopping and social infrastructure facilities. While its communal facilities may be of an older style they are considered on a like for like basis to be superior as well. This is reflected in current site rent of $209.50 for standard sites. Having regard to its overall superior qualities I do not consider it comparable to RVHB. I note that its site rent is inclusive of unlimited water usage and even with the allowance of between $5.00 to $10.00 a week which Mr O'Sullivan stated it was appropriate to take into account the superior location that would still result in a site rent approaching $200 which would be excessive for RVHB. Palm Lake Resort Hervey Bay is in a suburban location which is noted to be superior and has superior like for like facilities. Its current site rent is $195 per week which is considerably lower than Golden Shores I take that as being reflective of it having an inferior location to Golden Shores.
[49] I consider that it is a comparable park and with an appropriate adjustment to its site rent of $10 per week having regard to the allowance for Hervey Bay location that would be a rent which was comparable for RVHB. While noting the superior facilities at the Palm Lakes Resort Hervey Bay I have taken into account the larger site sizes, additional green space and the 15KL per month water allowance to balance that out. That then results in a site rent for RVHB of $185 per site per week. In regard to Palm Lakes Resort Bargara this was considered by Mr O'Sullivan to be closest as a comparable residential park as it was in a township away from many facilities though on the Coast with as mentioned above superior facilities to all residential parks in the region. I note that Mr O'Sullivan accepted that it was appropriate in his supplementary report that RVHB be at a discount to Palm Lakes Resort Bargara when he noted that it had a site rent increase in July 2020 and RVHB was at a discount of $7.58 week from that though this was before adding backing the water allowance. Again having regard to Palm Lakes Resorts Bargara having a slightly superior coastal location and superior facilities balanced with the larger site sizes, additional green space and the 15KL a month water allowance at RVHB I consider that there should be a $5.90 a week discount on Palm Lakes Resort Bargara which would again mean a weekly site rent for RVHB of $185 per site per week. Therefore overall taking into account the factors in s70(5)(b) the site rent for RVHB should be $185 per site per week inclusive of the 15KL per month water allowance. I note that I have taken Latitude 25 into account as it is a developing residential park and in that regard I agree with Mr O'Sullivan.

[48]

[52] Serenitas submitted that site rent increases have been performed each year as required by the home owners site agreements. That all site rent increases have been performed pursuant to s69 of the MH Act and there has not been nay extraordinary review of the site rent outside of the site agreement pursuant to s71 of the MH Act. It is noted that RVHB has only undertaken a market rent review twice since its establishment in 2011, once in 2017 and most recently in 2020. It was submitted that the previous site rent payable was significantly below the applicable market rate. This was based on a market rent valuation performed by Mr Stanaway which found that the market rent site rent was $185 at the time of the 2017 market rent review. When the home owners were presented with the increase they disputed and ultimately it was resolved by mediation at the Tribunal with an increase to $165 with capped annual increases. Mr O'Sullivan supported the submissions of Serenitas in this regard. When the current market rent was calculated based on the $185 increase it was very close to the market rent rate found by Mr O'Sullivan. Cases were cited to show that the Tribunal should take account of any situation where home owners have enjoyed significantly lower rent than market
[53] The home owners submitted that taking into account the market rent review in 2017 site rent had increased by $51.45 or 35.5% in a period of 3 years and one day. They denied the submissions by Serenitas that they enjoyed a rent below the market rent in the basis that it was agreed outcome between the parties.
[54] I note the history of market rent increase. I do not accept that the home owners have enjoyed a below market rent. When Mr Stanaway's report is perused it is clear that he did not find any residential parks which he considered comparable to RVHB in terms of location or site size and used general trends in residential park site rent. His valuation was never tested and the site rent was as agreed between the parties and I take that as the appropriate site rent for me to consider.

At a glance

Court

Decision date

Source

Judgment (75 paragraphs)

Stonehouse, Hamer, Tassell & Ors v Serenitas Communities Holdings Pty Ltd [2022] QCAT 91 (23 March 2022)

Parties